ECB May Halt Rate Hikes at 3%

The European Central Bank (ECB) is unlikely to maintain interest rates significantly above 3% as market pricing suggests, according to Goldman Sachs Research. The research firm's economists are skeptical about the ECB's ability to keep rates high due to renewed energy price spikes that will weigh on economic growth in the coming months.

The market currently expects the ECB to step up the pace of interest rate hikes amid resilient economic growth and renewed energy inflation pressures. However, Goldman Sachs Research forecasts one more hike in December 2026 but does not believe rates will remain above 3% as markets are pricing them.